Bigger Tariffs, Bigger Casualties: Germany's Exports to USA Plunge post US Decision
Imports into the USA dramatically decrease
The ruckus in the global trade environment isn't slowing down anytime soon. The German export industry took a significant hit in April, according to preliminary figures from the Federal Statistical Office. The value of "Made in Germany" exports dropped by 1.7% compared to March 2025, and by 2.1% compared to April 2024.
The trade dispute with the USA, led by President Donald Trump's tougher trade policies, appears to be the prime culprit. Exports to the USA—the largest trading partner of Germany—declined by 6.3% month-on-month and reached their lowest level since October 2024, standing at €13 billion.
The Steel Curtain
In the first quarter of 2025, German exports had actually increased. However, the landscape changed drastically at the beginning of April, when Trump announced a tariff hike. The tariffs on steel and aluminum imports were raised from 25% to a whopping 50%. As of June 4, 2025, these tariffs apply to all U.S. trade partners, with some exceptions for specific agreements[1][2].
A Storm Brewing on the Horizon
The escalating trade war could lead to a range of outcomes:
- Trade Retaliation: The European Union (EU) is mulling over countermeasures against U.S. tariffs. If negotiations fail, the EU might impose additional duties on U.S. imports, such as aircraft, automobiles, and industrial machinery[2].
- Market Dynamics: The tariffs could induce a shift in market dynamics where U.S. industries rely more on domestic production. However, this could lead to increased costs for sectors like aerospace and defense which are reliant on imported steel and aluminum for specialized applications[1].
- Economic Impact: The increased tariffs could lead to a reduction in German steel and aluminum exports to the U.S., potentially affecting the German economy. This could result in job losses and economic strain in sectors dependent on these exports.
- Negotiation Outcomes: The tide of ongoing U.S.-EU trade negotiations will be decisive. Agreements that include quota systems or tariff reductions could benefit German exporters. Conversely, failure to reach agreements could mean more barriers for German exporters[3].
- Global Trade Implications: The tariffs could have broader implications for global trade, spurring other countries to adopt similar protectionist measures. This could lead to a complex web of tariffs and countermeasures, potentially disrupting global trade flows.
Stay tuned as we continue to monitor the developments in this saga, with significant implications for the global economy.
Sources: ntv.de, chl/dpa/DJ
- Tariffs
- Trade conflicts
- USA
- German export
- The escalating trade conflict between the USA and the European Union, prompted by President Donald Trump's tougher trade policies, may result in a reduction in German steel and aluminum exports to the U.S., potentially impacting employment in sectors dependent on these exports, such as the community and employment policies within the broader business and finance industry.
- TheAmerican industry, particularly sectors like aerospace and defense, could experience a shift in market dynamics due to increased costs as a result of the tariffs imposed on steel and aluminum imports by the Trump administration, potentially affecting employment policies and the finance sector globally, including the German export industry.
